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Jul 192023

MSFT: Microsoft Stock Hits All-Time High After It Reveals $30 Per Month AI Subscription

Generative AI is coming to replace your manual typing on Word and Excel. And why take notes on Teams if you can pay $30 for a bot to do it?

  • Microsoft stock (ticker: MFST) took off to a fresh all-time high on Tuesday after the software giant unveiled that a new generative AI feature is coming to its apps. The new version of the flagship Microsoft 365 software will be boosted by AI capabilities and will cost an additional $30 a month.
  • The Microsoft 365 Copilot, as it is called, will include AI assistance for Word, PowerPoint, Excel, Outlook, and Teams. The lofty price tag will add between 53% to 83% more to the average cost paid by more than 382mn Microsoft 365 users. The flip side? Automated PowerPoint presentations, creativity unleashed in Word, and summarized Teams meetings.
  • Is the sweeping change worth the upgrade? Microsoft is yet to announce when it will be available to the wider public. Investors did rush to buy the stock up, launching the company’s shares into never-before-seen territory. Microsoft jumped 4%, closing at an all-time record of $359.49 a share. Year-to-date, the stock is up roughly 50%.
Efes / Wikimedia Commons
Jul 072023

MSFT: Microsoft Defies Gravity as Stock Pops 1% Amid Broad Selloff. Thank Morgan Stanley.

The software giant was the only company to finish Thursday in the green out of all 30 names in the Dow Jones.

  • Microsoft stock (ticker: MSFT) logged a comfortable 1% advance on Thursday, bucking the broader market selling wave. Investors poured their support during a tough day for equities after a Morgan Stanley analyst raised his price target for the stock and put it as a top pick among big software companies.
  • Microsoft finished the session at $341.27 a share, ending up the only gainer amid a sea of losers in the Dow Jones Industrial Average. Morgan Stanley’s Keith Weiss gave Microsoft stock a solid boost raising his 12-month price target to $415 from $335 a share.
  • Fun fact: the stock would need to land at $403.47 a share to hit a market valuation of $3tn. Such extra capitalization has been achieved only by Apple (ticker: AAPL). The iPhone maker regained its record-high value earlier this month after adding a chunky $1tn in the first half of 2023.
Illustration by TradingView
Jun 272023

MSFT: Microsoft’s 2030 Sales Target Revealed to be $500bn

  • Microsoft’s 2030 revenue goal has been revealed in a court filing published Monday.
  • The tech giant is aiming for revenues of $500bn by the fiscal year of 2030 – almost double its current revenue.
  • The company’s attempted acquisition of Activision Blizzard is likely a component of its growth plan.

In a court filing which was released on Monday, the 2030 sales goal of tech giant Microsoft was revealed. The company’s CEO, Satya Nadella, reportedly stated that they were aiming for revenue of $500bn by the fiscal year of 2030 – with an annual growth rate of 10% targeted. It’s a lofty ambition, as $500bn represents close to double Microsoft’s current annual revenue. The statement was made during a hearing relating to the company’s attempted acquisition of
Activision Blizzard.

It’s a rare piece of insight into the long term goals of Microsoft, which is known for seldom issuing guidance so far into the future. It might also shed light on why Microsoft was so eager to acquire Activision Blizzard – as it could be seeking to quickly diversify and expand its revenue generated from the gaming sector. However, with antitrust challenges to the deal still in full swing, it’s unknown whether the deal will even be able to go ahead globally.

(About Microsoft)
Microsoft is a multinational technology company founded by Bill Gates and Paul Allen in 1975. It has since become one of the world's largest and most influential companies, operating in various sectors such as software development, cloud computing, hardware, and digital services. One of Microsoft's core strengths lies in its software products. The company is best known for its flagship operating system, Microsoft Windows. In addition to operating systems and productivity software, Microsoft has developed a diverse range of products and services, and it has a significant presence in the gaming industry with its Xbox consoles and the Xbox Live online gaming platform.
May 162023

MSFT: Microsoft’s Activision Blizzard Acquisition Approved by EU Commission

  • Microsoft’s $69bn acquisition of Activision Blizzard has won approval in the EU.
  • The European Commission said that the acquisition would in fact improve competition and would stimulate the cloud gaming market.
  • However, the tech giant still has to overcome opposition to the deal in both the US and the UK.

In a surprise change of tone for Microsoft’s attempted $69bn acquisition of Activision Blizzard, the European Union’s competition regulator has approved the deal.

The rationale for the approval of the acquisition was that the deal will give much needed stimulus to the cloud gaming market which is still in its infancy. The European Commission also said that the deal would increase competition in the industry rather than hinder it. One stipulation of the approval was that Microsoft must automatically license its games to the cloud gaming services of competitors as they are released.

Deal still in jeopardy

Despite approval in the EU, the deal was blocked by the UK’s Competition and Markets Authority (CMA) and has been challenged by the US Federal Trade Commission (FTC). Some analysts have said that despite being a win in principle, the approval likely does not change Microsoft’s position drastically. The tech giant will now have to win legal challenges of rulings in both the US and the UK in order for the deal to proceed.

(About Microsoft)
Microsoft is a multinational technology company founded by Bill Gates and Paul Allen in 1975. It has since become one of the world's largest and most influential companies, operating in various sectors such as software development, cloud computing, hardware, and digital services. One of Microsoft's core strengths lies in its software products. The company is best known for its flagship operating system, Microsoft Windows. In addition to operating systems and productivity software, Microsoft has developed a diverse range of products and services, and it has a significant presence in the gaming industry with its Xbox consoles and the Xbox Live online gaming platform.
Apr 272023

MSFT: Microsoft Smashes Through Q3 Expectations, Believes AI Will Drive Growth

  • Microsoft’s Q3 earnings beat has the markets feeling more positive about the tech sector.
  • Revenues for its cloud computing segment was the biggest surprise, surpassing analyst expectations by 16%.
  • The company expects revenues for its AI projects to scale alongside growing demand.

Microsoft has released its Q3 report, which was positive enough to cause a 7% increase in its share price yesterday. The tech-giant reported earnings per share of $2.45 per share compared to estimations of $2.23 per share, and also beat revenue expectations – logging $52.85bn against expectations of $51.02bn.

Net income had also logged a 9% increase to reach $18.3bn from $16.73bn a year prior, and its reported revenue marks a 7% increase from the year prior. One of the biggest surprises contained in the report was the performance of its cloud business unit. The segment’s revenue came in at an impressive $22.08bn, which was 16% higher than what was expected by analysts.

What’s next for Microsoft?

Microsoft’s CFO has said the company expects AI to be a major growth factor, after announcing a $10bn investment in OpenAI, the developer of ChatGPT, at the start of the year. The company noted demand for AI related products to be growing, and expects this to translate into growing revenue in the year to come. The bad news for Microsoft came in the form of Windows OS sales, which had declined significantly by 28%. Additionally, UK antitrust watch dogs just blocked its intended $69bn deal to acquire Activision Blizzard.

The tech sector saw the Q3 report as such a positive signal that the Nasdaq saw gains yesterday – although most of those gains have since been lost. Macroeconomic headwinds are continuing to put pressure on consumer spending habits and global demand for PCs is estimated to have fallen by over 30% since 2022. This has the potential to put a dampener on Microsoft’s recovery.

(About Microsoft)
Microsoft is an American multinational technology company that develops, licenses, and sells computer software, consumer electronics, and personal computers. The company was founded in 1975 by Bill Gates and Paul Allen and is headquartered in Redmond, Washington. Microsoft is best known for its Windows operating system, which is used on most personal computers worldwide. The company also produces other software such as Microsoft Office Suite, Microsoft Edge web browser, and the Xbox gaming console. In addition to software, Microsoft also manufactures and sells hardware products such as the Microsoft Surface line of tablets and laptops. Microsoft has diversified its business interests in recent years and has expanded into areas such as cloud computing and artificial intelligence. The company is one of the largest in the world by market capitalization.
Sunny Hassan / Unsplash
Mar 312023

MSFT: Microsoft Nearing Settlement Agreement Amid Cloud Computing Antitrust Concerns

  • Microsoft is nearing a settlement deal with some companies in cloud computing antitrust battle.
  • The complaints were first brought to the EU competition watchdog last year.
  • Amazon-backed CISPE however, will be continuing with its own antitrust complaint.

Microsoft has been juggling a series of antitrust concerns for some time now. The main issue of course being its $69bn deal to acquire Activision Blizzard which was proposed in January 2021. Recently, the prospects of that deal are beginning to look more positive, with a number of national regulators including those of Japan and the UK weakening their stances. However the tech giant has also been dealing with European complaints surrounding anti-competitive practices in its cloud computing unit. And this week, there’s been positive signs that it could be coming to an end too.

What were the complaints?

Last year, three separate cloud computing companies based in Europe filed complaints against Microsoft, alleging that the company’s business practices make it difficult for customers to use the services of a competitor. Even Google has weighed in on the issue, suggesting that European regulators are not scrutinizing Microsoft’s practices closely enough. Google also criticized them for allegedly buying out the companies who file complaints against them.

What’s happening now?

This week however, Microsoft is very close to finalizing a settlement deal with some of the companies who brought the complaints to the regulator. An official announcement has not yet been made, but one is expected to be released in the near future confirming the details. The deal will reportedly involve some companies including OVHcloud dropping their complaints, but some companies (including Amazon-backed CISPE) will be continuing with its own complaint. As for Microsoft’s share price, they’ve had a fairly positive month with a 14% gain since it began.
Turag Photography / Unsplash
Feb 222023

Microsoft Fights its Corner at Hearing Over Activision Blizzard Deal

  • Microsft has defended its Activision Blizzard deal during a meeting with EU regulators.
  • The tech-giant already signed a deal ensuring Call of Duty is brought to Nintendo consoles.
  • Experts believe the deal’s next hurdle will be challenges by the the UK’s Competition and Markets Authority.

During its meeting with EU regulators in Brussels yesterday, Microsoft had to make its case for its proposed $69bn deal to acquire video game publisher Activision Blizzard. It has had to deal with Britain's antitrust watchdog suggesting that Call of Duty might have to be divested for the deal to go ahead. Yesterday’s meeting however suggested that Microsoft might be less willing to budge than previously expected.

What was said during the showdown?

Microsoft seems to have put its foot down on suggestions that it would have to share Call of Duty with other companies. President of Microsoft Brad Smith said that it isn’t “feasible to think that one slice of can be carved out from the rest”. However Microsoft has been trying to play it fair. It has already made a deal with Nintendo and Nvidia (both major names in the video game industry) to ensure CoD is brought to their platforms. This would reportedly result in the title being made available to roughly 150m additional players.

However, regulators are still concerned about Xbox Game Pass – a Netflix-style subscription to video games. They believe having games be released exclusively through the service could unfairly disadvantage its main competitor Sony. They’re also concerns about Microsoft’s dominance in the cloud gaming space – a technology which allows users to stream gameplay to devices which are not actually running the game.

What happens next?

For the time being, Microsoft’s $69bn deal might still be in jeopardy. Experts believe that the biggest challenge the deal is yet to face is that posed by the UK’s Competition and Markets Authority (CMA). Although having already received the EU regulator’s lift of objections to the deal, it might yet be able to remedy them. Across the pond in the US however, a lawsuit by the Federal Trade Commission means the deal’s fate over there will likely take longer to be known. For now though, the deal's under attack on all fronts.
Web Summit / Flickr
Feb 082023

Wait, Microsoft’s Bing back in fashion?

It’s 2023 and we’re excited about Bing making a comeback? Let’s talk about that.

  • If you never thought Bing would pose a threat to Google, here you are. Microsoft’s $10bn bet on ChatGPT parent OpenAI is booming. The software giant is integrating some features of the viral bot tool into its Bing search engine, throwing down a challenge to Google.
  • Microsoft shares popped 4% on Tuesday as chief executive Satya Nadella didn’t mince words, saying what’s coming will demolish the high profit margins of search. If you don't know what this means, it underpins Google’s core business. Google holds 90% of all online search.
  • Can an AI-powered Bing chip away at Google’s dominance of the search market? But ChatGPT’s breakout success shot it into the stratosphere with everyone and their dogs talking about it. So now Google scrambles to launch its own AI bot Bard. Get the popcorn, this one’s gonna be big.
Rubaitul Azad / Unsplash
Jan 252023

To the clouds and back

Microsoft has released its latest earnings report – and it wasn’t what investors were hoping for.

  • Microsoft has reported disappointing results for its most recent financial quarter. The tech giant beat earnings with $2.32 per share compared to estimates of $2.29, but missed on revenue predictions with $52.75bn against estimates of $52.94bn. It comes just a week after it made the decision to let go of 10k employees.
  • What was more concerning however, was a forecast about its Azure cloud computing unit. Microsoft predicts growth in that area of its business to slow by up to 5% in the current quarter. The news sent cloud computing stocks like Datadog and Snowflake down by 2.13% and 3% respectively yesterday.
  • Adding to its cloud computing woes, Microsoft Teams experienced an outage today – and it’s estimated to have affected millions of users around the world. The service is used by over 280m people, so an outage is far from ideal. If Microsoft’s acquisition of Activision Blizzard is also blocked, it really won’t have been its year.
See all reported financials
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Jan 192023

Let the layoffs continue

It seems that even the largest companies cannot escape the layoff-bonanza that is 2023.

  • Microsoft has announced plans to let go of 10k employees as part of its plan to weather a forecasted slow in revenue growth. In October last year, the tech giant reported its slowest growth for the quarter since 2016.
  • The company already laid off around 1k employees in October last year, and it was far from the only tech company to do so – driven by diminished tech stock values and changes in consumer spending. Amazon also announced plans this week to let go of another 18k of its workers.
  • The last time Microsoft cut its headcount by close to this amount was in 2017, when its sales unit underwent a major reorganization. CEO, Satya Nadella, said that as a global company, it was always going to be affected by “what’s happening in the macro.”
Rob Curran / Unsplash
Jan 112023

Open the pod bay doors

Will AI take over the world? Maybe. But Microsoft wants a slice of the pie in any eventuality.

  • Microsoft is planning to invest $10bn in OpenAI, the creators of ChatGPT, valuing the company at $29bn. The chatbot has been rising rapidly in popularity, due to the premise that it could change the way we search the web. It’s a strategic move by Microsoft to try and increase its market share in the web search space – a market in which Google far outweighs it.
  • The deal entails Microsoft receiving 75% of the company’s profits until its investment is returned, at which point it will receive a 49% stake in OpenAI. The deal, however, has not yet been finalized and in fact was supposed to have been closed before the end of last year.
  • Morgan Stanley published a report in December claiming that ChatGPT could pose a major threat to Google’s dominance of the web search market, and Elon Musk already invested $1bn into OpenAI in 2019. Could an integration into Microsoft’s Bing be what’s needed to put it out in front? Only time will tell.
Dec 132022

A cloud-powered deal

Microsoft isn’t letting its stunted Activision Blizzard purchase slow it down, sealing a deal with the London Stock Exchange.

  • Microsoft has acquired a 4% stake in the London Stock Exchange Group, as part of a 10-year deal to provide cloud computing services to the exchange. The deal will see the tech giant provide analytics and modeling solutions across various parts of its business.
  • The exchange will be obliged to spend a minimum of $2.8bn on Microsoft’s products over the period. Its CEO, David Schwimmer, said that the deal will “transform the experience for customers”, and shares in the exchange rose by 3% on Monday with the news.
  • Microsoft has signed a few major cloud computing contracts recently. Just last week, the company signed a deal to provide its cloud services to the Pentagon until 2028, alongside Amazon, Google and Oracle.
engin akyurt / Unsplash
Oct 262022

The slowest growth in 5 years

Look, we’ll give it to you straight: there’s very little good news to report here, with many of Microsoft's most closely-watched segments on the decline.

  • Microsoft left investors feeling melancholy with its third quarter report despite a very slight beat on both ends. The tech giant posted EPS of $2.25 on revenues that saw an increase of 11% to come in at $50.12bn, though that represented its slowest quarterly sales growth in five years was accompanied by a 14% drop in net income.
  • Azure growth, PC sales and forex headwinds were all in the spotlight, but the kind that leaves you feeling blind and confused. Its Cloud unit posted revenues that were 20% lower than estimates at $20.33bn as Azure growth slowed, revenue from Windows licenses lost 15% as worldwide PC shipments declined 20% YoY, and a strong dollar has majorly hurt sales growth.
  • The brand saw its shares drop up to 7% in after hours trading, made worse by an earnings call that saw Microsoft give disappointing quarterly guidance and explain that the headwinds aren’t blowing away any time soon. The bearishness eked into other consumer and tech giants too, sending Amazon and Meta down just under 5% in extended trading.
See all reported financials
Max DeRoin / Pexels
Jul 272022

The dollar derails MSFT

Currency concerns are weighing down big tech, but Microsoft investors put blinkers on to the bad news and focus on a “shockingly robust” forecast.

  • Microsoft shares lifted up to 5% in extended trading on Tuesday despite the company disappointing on both ends with EPS that was up 2% and missed estimates for the first time since 2016 at $2.23 per share, on revenue that saw its slowest growth since 2020, up 12% YoY to come in at $51.87bn.
  • Worsening foreign-exchange rates was the biggest challenge this quarter. The dollar has been hitting fresh multi-decade highs this month, reducing revenue by $595m and earnings by $0.04 for the quarter. On top of that, Microsoft battled a slowdown in Cloud revenue growth, the worst decline in PC shipments in years, supply disruptions in China, and lower video game sales.
  • However, Microsoft logged into backyourself dot com and investors loved the confidence. The tech giant reiterated previous calls for double-digit growth in its revenue and operating margins for the full year, and while current quarter guidance missed estimates, the company confirmed demand for its Cloud segment continues to grow and should help hold up the team.
See all reported financials
Alexander Popov / Unsplash
Jul 222022

NFTs get sent to the The Nether

Microsoft-owned development studio Mojang bans NFTs from Minecraft, Ender Pearling (that is, teleporting) away from web3.

  • Minecraft banned NFTs from its game on Thursday, stating the “speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profiteering”. To many, the decision seems a step away from web3 and the potential income NFTs can provide, but they’re not the first: last November, Steam banned any games from its marketplace that used NFTs.
  • A game centered around blocks banning blockchains? Seems that way. Soon after the announcement, NFT Worlds – a project seeking to integrate NFTs onto Minecraft – saw its native token WRLD tank almost 70%. Since, its devs have come out and tweeted they’re “not leaving”.
  • More broadly, Microsoft hasn't publicly adopted an anti-NFT position, especially given theirs and other tech companies' known attraction to the metaverse. However, founder Bill Gates joked last month that, “Expensive digital images of monkeys” will “improve the world immensely,” referring ofc to Bored Ape NFTs. For now, Minecrafters will have to stick to NPC villagers and annoying skeletons.

GM all - Check the
Discord for announcements on the Minecraft situation.

We are working to figure out to what extent this will effect us and also have potential pivots planned in the absolute worst case that keeps us going.

We're not leaving.

Jul 072022

Nobody likes an unwanted probe

Financial watchdogs around the world are sniffing around Microsoft’s Activision Blizzard buy and what it means for competition in the tech space.

  • UK regulators have launched a probe into Microsoft’s $69bn purchase of Call of Duty maker Activision Blizzard, a deal that was announced back in January and will be the biggest tech deal in history if it goes through next year as originally planned.
  • It could have massive implications for the $190bn video game industry, and regulators wanna investigate if the deal will harm competition through higher prices or reduced choice. The FTC is also looking into the transaction, as well as Australia’s competition regulator.
  • The UK’s CMA has been like a dog with an antitrust bone recently, and this week also launched an investigation into Amazon’s marketplace to consider whether it’s abusing its dominance in the market and distorting competition by giving an advantage to its own retail business or sellers that use its service.
Jun 032022

Microsoft changes its outlook

When it comes to its outlook, Microsoft prolly wishes it was just talking about its emailing software – it just had to cut financial estimates for the year.

  • Microsoft had to tone down its estimates this week due to the ongoing macroeconomic headache companies as big as the tech firm are facing. In light of this, Microsoft has now lowered its revenue estimates by around a billion and cut EPS expectations from between $2.28 and $2.35, to the $2.24 – $2.32 range.
  • Since Microsoft gets around 50% of revenue from outside the US, the dollar weakening against other global currencies amid a time of inflation has hurt the company. Last week, it even had to accept that hiring would slow for the foreseeable future in all areas of its business.
  • MSFT dropped 2% on Thursday as a result, which isn’t all that bad considering some of the cliff dives we’ve seen in the stock market as of late. Elsewhere, the tech-heavy Nasdaq kinda shrugged its shoulders, holding a steady line on top of the 7% gain it made last week.
Ashkan Forouzani/ Unsplash
Apr 272022

Microsoft boasts rising revenue

Big tech earnings are officially in session, and Microsoft manages to keep things upbeat (for now) with another bout of double-digit revenue growth.

  • Shares surged as much as 7% in Tuesday’s extended trading – a much needed gain after April’s 12% losses – after smashing both ends in Q3. The computing giant boasted EPS of $2.22 on revenues that were up 18% YoY to hit $49.36bn. It may be the brand’s smallest revenue beat since 2018, but it’s still impressive in this winter of market discontent.
  • There’s a fair bit to celebrate, but its Cloud business success prolly tops the list. Azure (its cloud infrastructure bizz) saw revenue jump a whopping 46%, and its overall corporate cloud revenue rose 32% – helping insulate Microsoft from weaknesses in game consoles and hardware sales, as well as a 10% increase in sales and marketing costs.
  • The future's looking bright. Microsoft forecast fiscal Q4 sales of up to $53.2bn, just beating estimates, which includes a $100m sales impact from the war in Ukraine and a production slowdown in China thanks to covid. It was an positive start to earnings szn – RBC analyst Rishi Jaluria said “this is a good bellwether for the rest of software”.
See all reported financials
Illustration by TradingView
Jan 262022

The clouds are clearing

A solid forecast for Microsoft’s intelligent cloud unit clears up any post-earnings declines.

  • Sales topped $50bn for the first time thanks to its cloud unit, software, and gaming (which now has a new (Acti)vision); and Q2 beat on both ends with EPS of $2.48 on revenues of $51.73bn.
  • But, its Azure revenue was up only 46%, short of estimates and lagging behind the last two quarters, so the stock sank 5% after hours.
  • An earnings call reassured investors that its Azure revenue will accelerate this quarter, even in the face of increasingly heavy competition – prices did a 180º turn to trade up after hours, potentially also easing wider market fears about stunted tech growth.
See all reported financials
Daniel Ramírez / Unsplash
Jan 132022

Microsoft Arms itself with an in-house chip

Microsoft wants a piece of that in-house chip action, and it’s getting some talent involved to make it happen.

  • Microsoft swiped a former Apple (AAPL) semiconductor engineer to help ramp up its in-house Arm-based chip efforts.
  • Amazon (AMZN) and Apple have both made a raving success of their own Arm architecture-based microchips, taking their products into another league when it comes to computing power, and Microsoft doesn’t want to be left behind.
  • Arm seems to be muscling out Intel, which used to make the chips for these tech giants. Interestingly, Nvidia (NVDA) only recently argued that the courts are overstating Arm’s market power…
Laura Ockel / Unsplash